26 Jul 2009

IMF approves $US2.6 billion loan for Sri Lanka

12:03 pm on 26 July 2009

The International Monetary Fund has approved a loan of $US2.6 billion to help Sri Lanka weather the global economic crisis and rebuild war-torn regions.

The first tranche of $US322 million is available immediately, with the rest subject to quarterly reviews.

Colombo says the money will be used to start a"healing process" for the country.

Enterprise Minister Anura Priyadarshana Yapa said the money would pay for post-war reconstruction work in the north and east of the island - areas previously controlled by the rebels.

It is two months since the government crushed the Tamil Tiger rebels, ending a civil war that lasted 37 years. The conflict claimed up to 100,000 lives and left some 300,000 civilians displaced.

Sri Lanka approached the IMF regarding a loan in March, when its balance of payments fell into deficit for the first time in four years.

Britain and the United States abstained from a vote on the loan, citing humanitarian concerns during the fighting against the rebels.